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Economics of Nonprofit Organizations ECONOMICS OF NONPROFIT ORGANIZATIONS Weinberg College of Arts and Sciences Department of Economics Course ID: ECON 359 Winter 2020 Class: 3:30 – 4:50pm Mondays & Wednesdays Evanston campus: Technological Institute L361 Dean Karlan Professor of Economics and Finance, Frederic Esser Nemmers Chair Co-Director, Global Poverty Research Lab [email protected] Cellphone: 203-606-2409 Office Hours in KGH 4441: Monday & Wednesday 10:00am – 12pm or by appointment (email [email protected] to schedule) Shannon Coyne Senior Manager, Effective Philanthropy [email protected] Office Hours in KGH 4450: Wednesday 1:00 – 3:00pm Utsav Manjeer Teaching Assistant [email protected] Office Hours in KGH 3496: Tuesday & Thursday 11am – 12 noon OVERVIEW ECON 359: Economics of Nonprofit Organizations will explore the economic rationale for the non-profit sector, with a particular focus on how to model theoretically the value added of a nonprofit organization and how to estimate empirically its likely impact. There are two experiential learning aspects of class. First, student groups will work directly with nonprofit clients to conduct an “impact audit”, a tool and standard for assessing nonprofit effectiveness developed by ImpactMatters. Second, with generous support from The Philanthropy Lab, students will have $50,000 to donate to the nonprofit or nonprofits of their choice. Students will discuss and decide on the criteria and decision-making process. At the end of the quarter, students will decide on the grant or grants to make. This course is relevant for students who want to apply analytical thinking to philanthropy, whether for personal growth, public sector career aspirations or personal philanthropic aspirations. There will be three main, graded deliverables: (1) Guided Impact Report: an independent assignment completed individually and without direct interaction with the nonprofit organization, (2) Impact Audit Report: a group assignment that requires interacting directly with a partner nonprofit organization to estimate their cost effectiveness and quality of impact evidence, and (3) Impact Audit Presentation: presentation of the Impact Audit Report to the class and nonprofit client. COURSE LOGISTICS Pre-requisites: In addition to completing the pre-requisites (ECON 281, ECON 310-1, ECON 310-2; or equivalent with permission of the instructor), students must complete a brief application linked here: https://northwestern.az1.qualtrics.com/jfe/form/SV_3rNxMFSnnUUxxaJ. Books & Articles: Each week will have both required and suggested reading, either chapters from the below, or articles or reports. 1. The Most Good You Can Do, by Peter Singer, Yale University Press, 2015. 2. The Goldilocks Challenge by Mary Kay Gugerty and Dean Karlan, Oxford University Press, 2018. All students are required to purchase the course pack for ECON 359 from the economics department. Additional details will be provided to students in January. In addition, the following book is recommended but not required for the course: The Ethics of Giving: Philosophers’ Perspectives on Philanthropy, Edited by Paul Woodruff, Oxford University Press, 2018. Karlan ECON 359 Winter 2020 2 AccessibleNU: Any student requesting accommodations related to a disability or other condition is required to register with AccessibleNU ([email protected]; 847- 467-5530) and provide professors with an accommodation notification from AccessibleNU, preferably within the first two weeks of class. All information will remain confidential. Electronics in class: Research has shown that electronics in class (cellphones obviously, but yes even computers) detract from learning and engagement. No computers will be allowed to be out, and cellphones must be in pockets or bags. Exceptions granted for assistive technologies with appropriate accommodation notification (see above re AccessibleNU). Seating arrangement: Please maintain the same seat throughout the quarter. COURSE DELIVERABLES & GRADING 1. Class Participation (10%): Attendance will be taken for each class. The majority of class participation will be based on attendance. Students can miss or be late for up to two classes without penalty or explanation. Exceptions beyond two will be granted for health, religious or emergency reasons, and requests should be emailed to me. Being prepared for class and engaging in discussion is also considered part of “class participation”. There are two types of readings each week, required and suggested. Required readings and short assignments are subject to cold-calling. Suggested readings will be referenced, but will not be subject to cold-calling. I realize that there are many demands on student’s time. If you are unable to be prepared for class, then email me before the class and I will not call on you (no need to explain why). As long as there is no sign of abusing this privilege, you will be neither cold-called nor penalized. 2. Guided Impact Report (20%): For a midterm assignment, students will individually produce a guided impact report (“GIR”) on a nonprofit. This is an assessment of the nonprofit, but done with publicly available information rather than coordination or communication with the nonprofit. These GIRs will also form the basis for the class discussion on February 12 in which the class will decide the “default” charity against which nonprofit client charities must outperform in order to be considered for the grant. The assignment is due on February 10. 3. Short Assignments (25%): Several weeks (see syllabus for specifics) will have short written assignments due by noon the day before class, submitted via canvas. Grading is binary: completed with visible effort or not. 4. Impact Audit (45%): We have enlisted nonprofits to participate as partners in this course. We will assign student groups to one of these charities based student Karlan ECON 359 Winter 2020 3 preferences. Student groups will produce an Impact Audit Report. The Impact Audit grade has three components: i. Written report: Due by 5:00pm CT on March 16. (30 of the 45%) ii. Presentation: Student groups will present their report to the nonprofit outside of class and present a summary during class the week of March 2. (10 of the 45%) iii. Peer review: Due on March 16. Qualtrics survey will be sent at the end of the quarter. (5 of the 45%) NONPROFIT CLIENT ENGAGEMENT In teams of three to four, students will work with nonprofit clients to conduct impact audits. The nonprofit clients and projects of focus have been identified in advance by Professor Karlan and Shannon Coyne. At the end of the quarter, students will present their findings to the nonprofit and deliver an impact audit report. Students will rank their preferences for the nonprofit projects in Week 2 of the course. Students will be placed into groups based on their stated project preferences. Every effort will be made to match student groups with one of their top project choices. If students want to work in a group together, we encourage you to submit identical preference rankings. Please understand that student failure to fulfill the responsibilities of this course may jeopardize relationships between the nonprofit clients and Northwestern. Enrollment in the course signifies student commitment to act in a professional manner at all times when interacting with the nonprofit client, in order to serve as a positive brand ambassador for both Northwestern and the students. All students must commit to attending (virtually or in-person) the final presentations to their nonprofit clients, which will be scheduled outside of class the week of March 2. THE PHILANTHROPY LAB Northwestern University is partnering with The Philanthropy Lab to support this experiential learning course on philanthropy. With generous support from The Philanthropy Lab, students will have $50,000 to donate to the nonprofit or nonprofits of their choice. In addition to this class grant, additional resources may be granted if students participate in optional activities including a goal-setting exercise with The Philanthropy Lab and an evaluation exercise to follow-up on the class grants. Note that this funding component is complementary to but distinct from the student impact audit projects. We therefore ask that you do NOT share details of this grant opportunity with the nonprofit partners, in order to avoid generating any expectations for funding. Karlan ECON 359 Winter 2020 4 Two students from the class will also have the opportunity to represent the class (and make the case for additional funding for one of the class’ grantees) in awarding an additional $150,000 with student representatives from other universities at the Ambassadors Conference hosted by The Philanthropy Lab from June 18-21, 2020 in Dallas, TX. Additional information on The Philanthropy Lab Grant and Ambassadors Conference will be provided in week 1 of class. COURSE FORMAT ECON 359 Weekly Plan Week Date Discussion Details Impact Audit Tasks & Deliverables Other Deliverables Week 1 1/6 Introduction Why and how we give 1/8 Why should • Short Assignment #1 nonprofits exist • Sign and return Philanthropy Lab grant documents; complete pre-course survey Week 2 1/13 Estimating nonprofit Complete Qualtrics poll on project • Short Assignment #2 impact preferences by 1/13 1/15 Large philanthropy Students notified of project • Short Assignment #3 assignment by 1/15 and introduced to partner nonprofits. Week 3 1/20: No Choosing primary class outcomes & counterfactual 1/22 alternatives Week 4
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